Howard Lutnick, the Secretary of Commerce, was recently on television promoting such a product. This ignited a furious legal and political battle over whether he crossed the line into criminality under federal ethics statutes. In one now-infamous televised appearance in 1999, Lutnick endorsed the IPO and said, “It’s never going to be this cheap." This further comment received sharp rebuke from government ethics advocates. The battle is over a reactionary, regressive 1989 law. This law prohibits federal employees from using their public office for private gain, and it explicitly prohibits endorsements.
The Office of Government Ethics (OGE), tasked with enforcing this law, is currently without a head, creating a power vacuum in the agency's leadership. Along with this vacancy have come serious concerns about the responsible enforcement of even the most basic ethics laws in such high-profile cases. The OGE has yet to respond to a letter from Senator Elizabeth Warren. She and three other senators are calling on the White House to investigate the endorsement of Tesla by Lutnick.
The Commerce Department has the primary responsibility of enforcing the law regarding the secretary’s blessing. It’s a problem, because so far, it has refused to answer the Associated Press’s repeated requests for comment. The ongoing mess exposes a critical flaw in the enforcement apparatus for federal ethics rules.
The OGE had earlier sent an open letter to the White House, calling on them to look into the issue. Without a permanent leader already in place, the OGE cannot with any efficacy ensure compliance. It’s time for the Commerce Department to get serious. What legislators must do now is make sure that Secretary Lutnick listens to and respects the law.
Despite the criticism, White House spokesman Kush Desai defended Lutnick, citing his "immensely successful private sector career" and his "critical role on President Trump's trade and economic team." This defense is further indicative of the administration’s willingness to stand by Lutnick as calls for accountability and transparency continue to grow.
The criticism is based in the 1989 law. This foundational anti-corruption law keeps federal employees from using their government positions to make money for themselves. The law eventually zeroed in on the endorsements, specifying a ban on out-of-state endorsements. Public ethics experts say Lutnick’s public announcement should have been an obvious breach of this rule.
Kathleen Clark, an expert in government ethics, emphasized the gravity of the situation by stating:
“It’s the difference between holding an extravaganza and holding an opinion.”
Clark’s statement highlights the challenge of distinguishing between permissible advocacy and impermissible support. Such endorsements may constitute an abuse of public office.
Now, both the OGE and the Commerce Department refuse to comment, which calls into serious question any accountability. This failure to act is a huge blow to government ethics enforcement. If we don’t act boldly, we’ll set a dangerous precedent. It sets a dangerous precedent for future ethical violations by public officials.
